Election result tells a story of fragmentation

Event

The September 9th election ended in a stalemate between the two main blocs. The final result will be known on September 12th, but it is clear that the centre-left bloc (the Social Democratic Party—SAP, the Left Party and the Green Party) and the centre-right Alliance (the Moderate Party, the Christian Democrats—CD, the Centre Party and the Liberals) will be finely balanced. The far-right Sweden Democrats (SD) continue to hold the balance of power.

Analysis

The SD, the Left Party and the Centre Party saw the most gains, whereas those in the incumbent ruling coalition—the SAP and the Greens—and the Moderate Party saw their share of votes decline from the 2014 election. The SAP's provisional vote share of 28.4% is its worst in a century, but well above pre-election polls. Importantly, the SAP comfortably remains the biggest party. The Moderates' vote share dropped to 19.8%. The SD had hoped to overtake it, but ended with 17.6%—a gain of 4.7 points from 2014, but less than expected. All eight parties cleared the 4% representational threshold, the Greens with a slim margin.

The two main blocs' vote shares are almost even, but with neither close to an outright majority, the SD emerges as kingmaker. Currently the centre left is 0.3 percentage points (one seat) ahead of the Alliance, but this could change after absentee votes and votes from abroad are counted. The Alliance parties have demanded the resignation of the prime minister, Stefan Lofven, who has declared that he is not prepared to resign immediately and intends to remain in office until parliament resumes in the week commencing September 24th. Mr Lofven declared the end of bloc politics and aims to invite the Alliance parties to cross-bloc negotiations. These are likely to fail.

What will ensue is highly uncertain, but the Alliance parties favour the Moderate Party leader, Ulf Kristersson, as the next prime minister. He has vowed not to negotiate with the SD, which should allow him to form a government with one or more other Alliance parties. The SD, however, will be a constant thorn in the side of the next government, and such an administration will be vulnerable—a premature dissolution of parliament will be a risk.

Impact on the forecast

Our baseline forecast remains that a Moderate Party-led administration will take over. Mr Kristersson's authority to do so has been boosted by the fact that the party remains the second biggest, ahead of the SD.